Bosch CEO Pushes for European Digital Marketplace

BERLIN--European politicians need to work quickly to establish a uniform, Europe-wide digital marketplace, so as not to fall behind other regions like the U.S., the chief executive of German engineering group Robert Bosch GmbH said Tuesday.

"In the U.S., if a start-up starts in Silicon Valley, they can easily scale up their solution to the U.S.," Chief Executive Volkmar Denner said during a conference in Berlin on digital industry and the Internet of Things. "Today in Europe, we do not have a uniform digital market," he said.

Mr. Denner said it was essential that German industrial groups, like Bosch, learn from U.S. Internet companies like Netflix Inc. (NFLX). Those companies "start simple and scale up," he said.

The conference is centered around a German public-private initiative known as "Industrie 4.0," which seeks to bring the Internet of Things to German manufacturing and create smart factories, which would connect machines and product components over the Internet, allowing for full customization on the shop floor.

The nascent Industrie 4.0 platform is meant to help German industrial manufacturers--the backbone of the country's export economy--keep their competitive edge against the resurgence of U.S. industry.

Germany's foray into the industrial Internet comes as some politicians in Berlin have voiced concern about U.S. domination. Google currently handles 95% of all German internet searches, according to statistics portal Statista. The U.S. has responded by criticizing German and European efforts to rein in Google and other players as being protectionist.

But Mr. Denner used the conference to highlight Bosch's willingness to work with U.S. companies. He touted Bosch's collaboration with the Industrial Internet Consortium, a non-profit platform launched in March by U.S. industrial and tech giants, including General Electric Co. (GE) and Cisco Systems Inc. (CSCO). The ICC works to establish global standards and best practices for industrial applications of the Internet.

As part of the consortium's first public test-bed, Bosch worked with Cisco and Indian information-technology company Tech Mahindra (532755.BY) on positioning technology that allows for the digital tracking of a cordless nut runner on the shop floor of a factory, an example of the industrial Internet's potential to improve manufacturing efficiency.

Even though Industrie 4.0 was designed to strengthen Germany's industrial competitive position, Mr. Denner said the initiative was compatible with that of the U.S.-based ICC, but that the latter was "more pragmatic."

He said he didn't expect political resistance to German companies collaborating with the ICC initiative. "My impression is that [German Chancellor Angela Merkel] has charged industry […] to be active and successful and they leave it up to us how we do it," Mr. Denner said.

ICC Executive Director Richard Mark Soley, who was also present at the Berlin event, said: "Rather than talk about competition between Germany and the U.S. and Japan, it's better to talk about competition between Siemens, GE and Hitachi."

Regarding Google, Mr. Denner said the U.S. technology giant could be a both partner and a competitor in efforts to digitize German industry.

In relation to smart-car technology, Mr. Denner said Google was an important customer for Bosch. "In smart homes, I see more of a competitive situation," he added. Google last year acquired for $3.2 billion Internet of Things company Nest Labs Inc., which makes thermostats that can be remotely controlled by smartphones and other connected devices.

Mr. Denner's comments come a day after Bosch, which makes industrial, mobility, home and software solutions, announced plans to acquire ProSyst Software GmbH, which produces middleware and gateway software for smart devices.

Write to Christopher Alessi at [e-mail]

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